Nothing endangers globalization more than the yawning governance gap –the dangerous disparity between the national scope of political accountabilityand the global nature of markets for goods, capital, and many services – thathas opened up inrecent decades. When markets transcendnational regulation, as with today’s globalization of finance, market failure,instability, and crisis is the result. But pushing rule-making ontosupranational bureaucracies, such as the World Trade Organization or theEuropean Commission, can result in a democratic deficit and a loss oflegitimacy.
How can this governance gap be closed? One option is tore-establish national democratic control over global markets. This is difficultand smacks ofprotectionism, but it is neither impossible nor necessarily inimical to healthyglobalization. As I argue in my book The Globalization Paradox, expanding thescope for national governments to maintain regulatory diversity and rebuild frayed social bargainswould enhance the functioning of the global economy.
Instead, policy elites (and most economists) favorstrengthening what is euphemistically called “global governance.” According tothis view, reforms such as those that enhance the effectiveness of the G-20,increase the representativeness of the International Monetary Fund’s ExecutiveBoard, and tighten the capital standards set by the Basel Committee on BankingSupervision would be sufficient to provide a sound institutional underpinningfor the global economy.
But the trouble is not just that these global institutionsremain weak. It is also that they are inter-governmental bodies – a collectionof member states rather than agents of global citizens. Because theiraccountability to national electorates is indirect and uncertain, they do notgenerate the political allegiance– and hence legitimacy – that truly representative institutions require.Indeed, the travailsof the European Union have revealed the limits of transnational politicalcommunity-building, even among a comparatively limited and similar set ofcountries.
Ultimately, the buck stops with national parliaments andexecutives. During the financial crisis, it was national governments thatbailed out banks and firms, recapitalized the financial system, guaranteeddebts, eased liquidity, primed the fiscal pump, and paid the unemployment andwelfare checks – and took the blame for everything that went wrong. In thememorable words of outgoingBank of England Governor Mervyn King, global banks are “international in life,but national in death.”
But perhaps there is another path, one that accepts theauthority of national governments, but aims to reorient national interests in amore global direction. Progress along such a path requires “national” citizensto begin viewing themselves increasingly as “global” citizens, with intereststhat extend beyond their state’s borders. National governments are accountableto their citizens, at least in principle. So, the more global these citizens’sense of their interests becomes, the more globally responsible national policywill be.
This may seem like a pipedream, but something along these lines hasalready been happening for a while. The global campaign for debt relief forpoor countries was led by non-governmental organizations that successfullymobilized young people in rich countries to put pressure on their governments.
Multinational companies are well aware of the effectivenessof such citizen campaigns, having been compelled to increase transparency andchange their ways on labor practices around the world. Some governments havegone after foreign political leaders who committed human-rights crimes, withconsiderable domestic popular support. Nancy Birdsall, the president of theCenter for Global Development, cites the example of a Ghanaian citizenproviding testimonyto the US Congress in the hope of convincing American officials to pressure theWorld Bank to change its position on user fees in Africa.
Such bottom-up efforts to “globalize” national governmentshave the greatest potential to affect environmental policies, particularlythose aimed at mitigating climate change – the most intractable global problem of all.Interestingly, some of the most important initiatives to stem greenhouse gasesand promote green growth are the products of local pressures.
World Resources Institute President Andrew Steer notes thatmore than 50 developing countries are now implementing costly policies toreduce climate change. From the perspective of national interest, that makes nosense at all, given the global-commons nature of the problem.
Some of these policies are driven by the desire to attain acompetitive advantage, as is the case with China’s support for greenindustries. But when voters are globally aware and environmentally conscious,good climate policy can also be good politics.
Consider California, which at the beginning of this yearlaunched a cap-and-trade system that aims to reduce carbon emissions to 1990levels by the year 2020. While global action remained stalled on capping emissions, environmentalgroups and concerned citizens successfully pushed for the plan over theopposition of business groups, and the state’s Republican governor at the time,Arnold Schwarzenegger, signed it into law in 2006. If it proves a success andremains popular, it could become a model for the entire country.
Global pollssuch as the World ValuesSurvey indicate that there is still a lot of ground that needs to becovered: self-expressed global citizenship tends to run 15-20 percentage pointsbehind national citizenship. But the gap is smaller for young people, thebetter educated, and the professional classes. Those who consider themselves tobe at the top of the class structure are significantly more globally mindedthan those who consider themselves to be from the lower classes.
Of course, “global citizenship” will always be a metaphor, because therewill never be a world government administering a worldwide political community.But the more we each think of ourselves as global citizens and express ourpreferences as such to our governments, the less we will need to pursue the chimera of globalgovernance.